Green Plains Inc. of Omaha, Nebraska, said Monday that it has agreed to buy an ethanol production facility in Hereford, Texas, owned by Murphy USA Inc. of El Dorado, for $94 million.
According to a news release, the $93.8 million deal includes $78.5 million for the ethanol production facility; the balance is for working capital. The deal is expected to close this month.
The plant has a production capacity of about 100 million gallons per year. It includes a corn oil extraction system and other assets, the two publicly traded companies said.
“The Hereford facility has many strategic and financial advantages over other destination plants because of its location, leading to both export and domestic market opportunities for ethanol and distillers grains,” Todd Becker, president and CEO of Green Plains, said in a news release. “Because it is located near the largest concentration of cattle in the world, with over a million head of cattle fed within a 50-mile radius, the plant can produce a low carbon intensity fuel which is typically sold for a premium to ethanol produced at most other plants.”
Andrew Clyde, president and CEO of Murphy USA, said the deal is another example of the company’s strategy of selling non-core assets “in a manner that captures the most value for our shareholders.” Reuters reported Monday that Murphy USA had put the plant up for sale due to the ethanol industry’s “difficult environment.”
The plant’s shuttle unload facility can unload 40,000 bushels of corn per hour, and it has a grain handling system with more than 4.8 million bushels of storage. The plant also has 4.5 million gallons of ethanol storage capacity, the companies said.
Green Plains is an ethanol production, marketing and commodities company. Murphy USA, a spin-off of publicly traded Murphy Oil Corp. of El Dorado, is a gasoline retailer with 1,300 stations in the South and Midwest.
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